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Baker Hughes Q4 Profit Rises 16%, Sees Increased Activity Ahead


(RTTNews.com) - Oilfield services provider Baker Hughes Inc. (BHI) Tuesday reported close to 16 percent increase in fourth-quarter profit, as revenues improved with growth in several key segments. Looking ahead, the company sees increased activity in all its operational segments in 2014.

Net income attributable to the company advanced to $248 million from $214 million. Earnings per share rose to $0.56 from $0.49.

Adjusted earnings were $0.62 per share. Adjusted results exclude severance charges of $0.06 per share, but include losses of $0.18 per share in Iraq, primarily related to the significant disruption of operations.

On average, 25 analysts polled by Thomson Reuters expected earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter improved to $5.86 billion from $5.33 billion in the previous year. Wall Street expected revenues of $5.68 billion.

In North America, revenue improved more than 7 percent to $2.744 billion, while Europe/Africa/Russia Caspian generated 10 percent more revenues at $1.046 billion. Middle East/Asia Pacific reported quarterly revenues of $1.121 billion, up 27 percent from last year.

The company repurchased $350 million of its shares during the fourth quarter.

For the year, net income attributable to Baker Hughes slipped to $1.096 billion from $1.311 billion in the prior year. Revenue improved to $22.364 billion from $21.361 billion.

According to the company, this record revenue growth was driven largely by the Eastern Hemisphere where its operations increased 14 percent, largely due to meaningful share gains in high growth markets such as the Middle East and Africa.

In the Middle East/Asia Pacific segment, revenue climbed 24 percent during the year, with solid improvement in profitability. In the U.S., Baker Hughes achieved four consecutive quarters of improved profit margins in its Pressure Pumping product line.

Martin Craighead, CEO, said, "During the year, we generated $1.5 billion of free cash flow, a record for Baker Hughes. This was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on key initiatives to improve working capital.''

Looking forward, the company projects increased activity in all its operational segments in 2014, led by 10 percent rig count growth in international markets and 5 percent well count growth in the U.S.

BHI closed up 0.8 percent on Friday at $54.14.

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